When your business suffers a loss from a fire, or other natural disasters there is so much more that goes along with it. Business owners face loss profits because of time lost for repairs or trying to come up the funds to cover regular daily operating expenses.
Fortunately, for Chicago business owners they can add Business Interruption coverage to their commercial insurance policy to help cover the gaps in income.
Understanding Business Interruption Insurance
Business interruption insurance is an add on coverage that replaces a company’s income lost because of interruptions to business due to a covered loss. The amount received during this time depends on the past financial records of your business. Coverage only applies during the business interruption period. Typically, this is the time from when the loss occurred to the date the physical property is repaired, and you can return to business as usual.
It’s crucial you understand; however, the business interruption coverage will not cover the “slow” periods of business. The loss of income must be the result of a covered loss. Coverage is only triggered in three limited scenarios:
- The physical damage to the premises is to an extent that the business must stop its operations.
- There is physical damage to other property due to a loss typically covered under the business’s insurance policy, and that damage wholly or partially blocks employees or customers from access to the business.
- The government shuts down an area because of property damage caused by a covered peril covered on the business’s insurance policy that prevents customers or employees from gaining admittance to the premises.
Take a look at this example. A business suffers a fire loss at its manufacturing facility that stops all operations for three months. During the three months, the company continues to pay salaries, utilities, rent, and other fixed costs necessary for services to restart. For the business to become whole again, the business is allowed reimbursement for net income as well as operating expenses paid during the recovery period.
As you can see Business Interruption insurance when added to your commercial insurance can offer the maximum protection for your business needs to keep ongoing after a major disaster.
The business interruption coverage may provide the following funds for Illinois business owners:
- Operating costs
- Costs for new equipment and training
- Extra expenses incurred to get the business up and running again
- Civil authority ingress/egress
- Employee wages
- Loan payments
To learn more about Business Interruption insurance or what it can do for your business, please contact our insurance experts today!